2015 (8) TMI 1361 - AT - Income Tax

Claim of foreign tax credit - Held that - From a perusal of the annexures filed by the assessee along with the written submissions for A.Y. 2010-11, it is observed that the assessee had electronically filed its return on 28.9.2010. In the said return, in col. No.10, no tax relief u/s. 90 or 91 has been claimed. The assessee filed a revised return on 29.3.2012 electronically. In Col. 10 of this return, the assessee had claimed relief u/s. 90 of ₹ 21,32,548. The return has been filed by the assessee within the time contemplated u/s. 139(1) of the Act. Neither the AO nor the CIT(Appeals) considered the claim of assessee in the revised return of income filed. We are therefore of the view that the claim of assessee for FTC has been made in the return of income and had been omitted to considered by the AO and CIT(Appeals). We therefore deem it fit and proper to set aside the order of the CIT(Appeals) on this issue and remand the same to the Assessing Officer for fresh consideration Levy of interest u/s. 234C - whether levy is on the returned income or assessed income - Held that - From a plain reading of the provisions of section 234C, it is clear that levy of interest u/s. 234C of the Act is on the returned income. We therefore direct the AO to levy interest on the returned income.

Summary

Issues:
1. Claim of foreign tax credit - Rs. 21,32,548
2. Levy of interest u/s. 234C of the Act
3. Charging of interest u/s. 234D of the Act

Claim of Foreign Tax Credit:
The appellant, a company providing software development services, filed a revised return to claim Foreign Tax Credit (FTC) of Rs. 21,32,548 for the assessment year 2010-11. The Assessing Officer (AO) did not grant the credit, as it was not claimed in the original return. On appeal, the CIT(A) also denied the claim. The ITAT observed that the revised return did claim the credit, but it was not considered by the AO or CIT(A). Consequently, the ITAT set aside the CIT(A)'s order and remanded the issue to the AO for fresh consideration.

Levy of Interest u/s. 234C:
The appellant contested the levy of interest u/s. 234C, arguing that it should be on the returned income, not the assessed income. The ITAT analyzed the provisions of section 234C and concluded that the interest is indeed to be levied on the returned income. Therefore, the ITAT directed the AO to levy interest on the returned income, allowing this ground of appeal.

Charging of Interest u/s. 234D:
The appellant raised a concern about the charging of interest u/s. 234D, which was deemed consequential. The ITAT directed the AO to provide consequential relief in this regard. Consequently, the appeal by the appellant was partly allowed, with the ITAT pronouncing the judgment on August 7, 2015.